More US Sanctions: How Far Should We Go?



Multilateral sanctions are bound by the Security Council process, and we noted the modesty of Resolution 2356 in a recent post. Alexandre Mansourov (SAIS) reminded me that “modest” might be too kind. The list of sanctioned individuals included Pak To-ch'un (73), Park Se-bong (79), Ri Jae-Il (83) and Ri Yong-mu (92), individuals who are almost certainly out of the policy loop. National actions under existing legislation are not so constrained. Nor is Congressional legislation, which can sanction to its heart’s content. There are now a series of actions and proposals in play, including a travel ban. As we think about more creative ways to cut off the regime’s income, it is equally incumbent to think more clearly about what role civil society engagement plays in the long game with North Korea.

First up, what has actually been done. On June 1, Treasury quietly added a number of designated persons and entities to its list. Anthony Ruggiero parses the additions at the Foundation for Defense of Democracy, and Josh Stanton notes the limits. But the implications of the designations are wider than might first appear. While avoiding Chinese enablers, Treasury has gone after two Russian companies, one for doing business with the designated Korea Tangun Trading Corporation, the other for signing a contract to refuel Air Koryo planes in Vladivostok. The significance is not in the fact that Russian companies are involved in such business; we know from the Panel of Experts that they are hardly alone (see some interesting coverage on Southeast Asia here and here). What is significant is that in contrast to the first round of designations by the Trump Treasury department, this round includes secondary sanctions on non-North Korean entities for the first time, signaling the possibility of more to come. 

Also on the list was the Korea Computer Center (KCC), which Ruggiero notes has offices in Germany, China, Syria, India, and the UAE. Not only has it been earning money for the regime, but it is also probably involved in the country’s cyber activities, which now include the most recent malware episode. Ruggiero poses exactly the right question: why is KCC allowed to operate in these countries at all?

As we think about more creative ways to cut off the regime’s income, it is equally incumbent to think more clearly about what role civil society engagement plays in the long game with North Korea.

When Josh Stanton says the Hill is marking up bills faster than he can read them, you know that Congress has been busy; his post reviews the array of efforts that were in play earlier in the year. The most consequential has been given the handy moniker of the Korean Interdiction and Modernization of Sanctions Act, or simply KIMS Act. As always, Dan Wertz at the National Committee on North Korea provides a lucid tabular. The core of the legislation is the effort to expand the activities contained in last year’s North Korea Sanctions and Policy Enhancement Act (NKSPEA) against which the United States can deploy secondary sanctions. These include:

  • An expansion of the list of activities that would trigger mandatory rather than discretionary sanctions, including the purchase of certain minerals from North Korea, the provision of goods or services to North Korean vessels sanctioned by the UN or U.S., or the maintenance of a correspondent account with a North Korean financial institution. Sanctioned entities may not only face loss of access to the U.S. financial system, the main source of leverage, but also civil or criminal penalties.
  • New discretionary sanctions targeting North Korea’s major sources of export earnings (such as coal, iron, textiles, seafood, and overseas workers), as well as against entities providing petroleum or telecommunications services to North Korea.
  • Strengthened penalties against international ports and countries that do not adequately enforce UN sanctions against North Korea, including a ban on vessels from such countries from entering U.S. waters or ports. This could be particularly significant, less for its direct effect than because it will generate more deflagging, restricting the number of countries that are willing to play the shipping spoiler role.
  • Strengthened sanctions with respect to North Korean labor exports. 

Finally, I need to make mention of a proposed travel ban, as it generates more than a little ambivalence. The proposal is aimed primarily at tourism, but could have wider effects.

My colleague Marc Noland has argued strongly that we should shut down the tourist business, not only because of the revenue it generates but for the fact that the engagement it purports to spawn is largely fake: a new sort of Orientalist tourism marketed around North Korea as a bizarre and forbidden destination. The ban is also motivated by the fact that we no longer have “detainees” but what appear to be hostages: four Americans who have been seized, two of which have been sentenced to long prison terms (our last post on this drama, on Kim Hak-song, can be found here with links to the pantheon of others). The diplomatic effort and anxiety around these detainees is non-trivial.

True, but two counterarguments emerged during discussions at a gathering of North Korea watchers over the weekend in San Diego. First there is the libertarian argument that citizens in a free country should have the right to travel as they see fit. To be sure, the government has the legal authority to restrict travel. But should it? Under this argument, the best that the government should be able to do is issue appropriate warnings, which have indeed been updated and toughened recently (here, with New York Times coverage here).

But more important in my view are the host of engagement activities that generate significant human contact and learning, and on both sides. Marc Noland and I have long argued that getting people into and out of North Korea should be a core policy objective, as long as those going in are able to communicate with their counterparts. As Andrew Yeo details later this week in a guest post, these activities are not insubstantial and a travel ban could well dampen them.

If the administration is serious about “maximum pressure and engagement,” it needs to figure out where the line is between those activities that should be sanctioned and those we should actually be encouraging as part of a much longer game. Nor is this issue academic: it will play a central role in upcoming discussions with the incoming Moon Jae-in administration.

My take is that activities that profit from the relationship with North Korea should be on the sanctions side of the line, while those that are engaged in humanitarian and other social and professional contact should not. To be sure, general licenses from Treasury do in fact provide legal cover for an array of activities. But the model is wrong: some of these should not simply be tolerated, but encouraged. Wherever that line is ultimately drawn, we need a conversation on it.

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